Loans in European currency have now become a scarce commodity. Access to it is only for selected customer groups that earn much more than the national average salary. What contributed to such a drastic reduction in the availability of loans in euros?
Two factors can be mentioned here, namely Recommendation S of the Polish Financial Supervision Authority and changes in bank offers caused by the uncertain situation on European financial markets.
One of the reasons for restricting access to loans in euros is the SIII recommendation of the Polish Financial Supervision Authority, which banks had to implement by the end of last year. It assumes that a foreign currency loan cannot exceed 42 percent of the borrower’s net income. At the same time, banks are required to calculate the maximum amounts available, assuming a repayment period of no more than 25 years. The overlapping of these two guidelines reduces the creditworthiness in foreign currency by up to several dozen percent.
Another important factor affecting banks’ withdrawal from offers in the single currency is the crisis on European financial markets. Limiting the support for banks operating on the Polish market from their foreign owners means an increase in the cost of obtaining money and the need to increase credit spreads for loans granted in the European currency. In view of the above, some banks decided to withdraw their loans in the European currency completely. In recent weeks, this has been done, among others, by Wide-S Credit or Mega Credit Bank. The other banks, which have been eager to grant loans so far, have also changed their offer significantly. Virtually all institutions have increased their margins, which often, even in the face of the low level of the Euribor reference rate, makes such a loan an inexpensive way to finance the purchase of real estate.
What awaits us in the future?
The coming months are the time when it will be extremely difficult to get a loan in euros. The changes taking place in the mortgage market are reminiscent of the situation we had with Swiss franc loans. At that time, banks also gradually reduced their lending by increasing the borrower’s income requirements to eventually withdraw completely from Swiss franc loans. Undoubtedly, in the coming time credit in euros will be expensive and at the same time it will be available only to the highest paid people.
A reliable loan in USD
It is worth paying attention to the stable situation in USD loans. In this currency, banks willingly grant loans by financing lending, among others, through deposits obtained from retail customers. Margins for loans in dollars remain at a much lower level and despite higher interest rates, such loans can still be an alternative to loans in euros. This is a good solution especially due to the lack of exchange rate risk.